Bulgarian Telegraph Agency (BTA), 97-01-27

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From: Embassy of Bulgaria <bulgaria@access1.digex.net>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

27 January, 1997

CONTENTS

[01] PRESIDENT STOYANOV NAMES TEAM

[02] RULING PARTY AND OPPOSITION CONFER IN PRESIDENT'S OFFICE

[03] LEFT OFFERS NEW CONSULTATIONS, OPPOSITION REFUSES

[04] DECLARATION OF EU ON SITUATION IN BULGARIA

[05] BULGARIA IN FOR HYPERINFLATION

[06] ECU 20 MILLION IN PHARE ASSISTANCE TO DISADVANTAGED BULGARIANS

[07] BASE INTEREST RATE AND EXCHANGE RATES TO BE DETERMINED BY NEW METHODS

[08] THREE NEW GAS JOINT VENTURES FORMED

[09] BULGARIAN TV STAGES WARNING STRIKE

[10] BULGARIA, NETHERLANDS END CONSULTATIONS

[11] IRAQ READY TO SETTLE DEBT TO BULGARIA, IRAQI AMBASSADOR SAYS

[12] 19TH DAY OF STREET PROTESTS

[13] 20TH DAY OF STREET PROTESTS

[01] PRESIDENT STOYANOV NAMES TEAM

Stoyanov said his office has a horizontal structure and the secretaries will have free access to the President. Competence, loyalty to Bulgaria and to the presidential institution, capacity for hard work and ability to work in a team were the major principles Stoyanov followed in selecting the secretaries.

Mr. Stoyanov will not have a military office. The Bulgarian President is Commander-in-Chief of the Bulgarian army and as such he can go to the Chief of the General Staff any time he wants and demand information on any unit of the Bulgarian army, said Peter Stoyanov.

The President will have two Secretaries For Foreign Affairs: VALENTIN DOBREV and VLADIMIR FILIPOV. Dobrev was deputy foreign minister in the government of the Union of Democratic Forces (UDF), now in opposition. From May 1993 till 1996 he served as Bulgarian permanent representative at the European department of the UN and the other international organizations based in Geneva. Filipov, also a deputy foreign minister in the UDF government, served as Bulgarian ambassador to Portugal from March 1992 till May 1996. He was members of Stoyanov's election campaign headquarters.

ILIYA LAZAROV, also a member of Stoyanov's campaign headquarters, will be Chief of Staff. He holds a degree in international affairs from the Kiev State University and has worked at the UDF department of international affairs. He is the son of the current Bulgarian Ambassador to Italy Dimiter Lazarov.

The team includes two Secretaries for Legal Affairs: PLAMEN BOGOEV and SAVINCH OSMANOVA. Bogoev was legal adviser of President Zhelev too.

The former executive director of the Bank Consolidation Company, KRASSIMIR ANGARSKI, is appointed Secretary for Economic Affairs. He holds a PhD in economy and teaches at the Sofia University of National and World Economy as Associate Professor.

VASSIL TSAKOV and VULKANA TODOROVA are Secretaries for Agriculture.

BOGOMIL BONEV, former chief secretary of the Interior Ministry under the UDF cabinet, is Secretary for National Security Affairs.

Col. KIRIL VASSILEV is Secretary for National Defence. He has headed the office of the Chief of General Staff and has served for an year as deputy chief of the Operative Department of the General Staff.

KONSTANTIN TODOROV, MP of the UDF is Secretary for Domestic Policy.

The President's press office will be headed by IRINA YORDANOVA who held the same office in Stoyanov's campaign headquarters. TV anchor Neri Terzieva was appointed Secretary for Media Policy and Public Relations.

[02] RULING PARTY AND OPPOSITION CONFER IN PRESIDENT'S OFFICE

After the talks President Stoyanov said to reporters that he sees an opportunity for the political crisis to be settled only if any of the two political forces makes a compromise greater than it had initially planned. During the consultations Stoyanov voiced his personal stand that it is "almost impossible" for the Left to realize its intention of forming on its mandate a government of experts on a broad political basis.

"The dialogue failed and we do not see any point in holding talks like that which may mislead the public opinion that some rapprochement, some compromise, is possible," leader of the opposition Union of Democratic Forces (UDF) told reporters after the consultations. He reiterated the opposition's insistence that the Left decline to form a new Cabinet. "We came here, accepting the invitation of Peter Stoyanov and with the sincere wish to help him reach a solution in his very difficult mission," Ivan Kostov said. "Unfortunately we established complete difference in the positions and assessments on the political situation of the United Democratic Forces and the Democratic Left coalition" Kostov also said. He added that "it is obvious the BSP and the Left absolutely refuse to accept the facts."

"I believe we can outline the fact that political dialogue was resumed and that there is a feeling of consent on several major items: the readiness for, the consent on the imminent reforms is obvious, together with concern over the escalating social tension and the readiness of the two negotiating sides to do the maximum to preserve public order," Socialist leader Georgi Purvanov said before reporters. "We estimate highly the President's initiative to organised bilateral consultations of that kind," he said.

In his view "the dialogue can and should continue so that the political forces could clarify their views on the character of the future Cabinet, no matter whther it be a task-force or a caretaker one, to clarify the tasks facing this Cabinet as well as the laws which the Parliament should adopt." Purvanov said that during the consultations the Left promoted its position about "the need to have a government formed by the National Assembly which would be a task-force, expert one, with broad public and political support." "We clearly stated that we do not have in mind a second government of the Left, but that the point is to use the mandate of the Democratic Left for reaching a consensus and we still believe it is easier to come to a consent on the forming of a parliamentary, rather than of a caretaker government," the Socialist leader added.

Asked to comment on the consultations, Peter Stoyanov repeated before reporters the appeal he made to the political forces. "I said the talks to a great extent used the language characteristic for the Bulgarian Parliament, especially ýÍËÒžÊ the past year. I would like these talks to be more direct and more clear. I said I would not like the political forces in Bulgaria, especially the major political forces, to view the talks I suggested as some Balkantype bargaining: that each party should table its extreme demands and both parties are left with the impression that the negotiations will be completed with the achievement of a compromise somewhere in the middle between these demands. The political crisis will not be resolved by means of this Balkantype bargaining," Stoyanov said.

He added that during the talks he only once voiced his personal opinion and that was in connection with the Left promoting the stand that it is in position to form on its mandate a cabinet of technocrats which, according to the BSP, is not to be identified either with the BSP or with the hitherto applied policy of the Socialist government. "My personal position is that this is almost impossible in the short time we have to settle Bulgaria's problems. The society needs time, actions and proof to be able to distinguish any cabinet formed today on the mandate of the Left from the Socialist government so far represented by its Cabinet," Stoyanov said.

[03] LEFT OFFERS NEW CONSULTATIONS, OPPOSITION REFUSES

"The BSP is trying to play the role of a force which sets the agenda, but it will be President Stoyanov rather than the BSP that will provide a formula for the consultations," UDF leader Ivan Kostov said after seeing the President. Mr Kostov told reporters that there are differences in the views of the President and the opposition but declined to elaborate.

"We count on full support from the parliamentary group of the Left for Nikolai Dobrev's nomination for the prime ministership," Mr Purvanov told a brief news conference given during the interval of a meeting of the BSP top leadership, which went late into the night Sunday. The BSP leader expects the prime minister-to-be to receive more than 120 votes when his nomination is put to the vote in Parliament. The Democratic Left holds 125 seats, and the Bulgarian Business Bloc 9 seats in the 240-seat legislature. Election of a prime minister requires a simple majority.

"The new Cabinet will not be of the Socialists but a programme cabinet on a broad expert basis," Mr Purvanov emphasized. At a meeting on Tuesday the Left will consider all possibilities and options for the new Cabinet and will approve the structure and composition of the new government.

The BSP leadership will extend invitations to official talks on the future cabinet to the extraparliamentary formations with which only working meetings have been held so far. "We will also respond to the idea of the leader of the Bulgarian Business Bloc George Ganchev about consultations with the BBB parliamentary group," Mr Purvanov said. He is puzzled why bilateral rather than multilateral consultations on the new government are held at the President. He believes that the BBB should be included in these consultations as it may prove the key to a resolution of the political crisis.

[04] DECLARATION OF EU ON SITUATION IN BULGARIA

"The European Union wishes to express its deep concern about recent events in Bulgaria, a country with which the EU is closely linked through an Europe Agreement. Rapid and effective structural reforms are urgently necessary in order to secure the recovery of the economy. The European Union calls upon all political forces to work together in order to overcome the present deadlock and to restore the confidence of the Bulgarian people in the democratic institutions. In this connection, the European Union calls upon all concerned to contribute to the promotion of stable and effective government in a manner consistent with the constitution, in accordance with democratic procedures, and conducive to a climate in which outside assistance and advice can be effective. The EU encourages all political parties to support the recently elected President in his endeavour to facilitate compromise solutions including on a date for elections," the declaration says.

[05] BULGARIA IN FOR HYPERINFLATION

Hyperinflation is not dangerous when it encourages production, said economist Dimiter Dimitrov. He cited Turkey, which does have large denomination banknotes, but also has an abundance of commodities.

Former finance minister Stoyan Alexandrov, manager of the Central Cooperative Bank, said a bout of hyperinflation can be expected by the end of January. He called it a necessary evil which will settle the matter with the huge internal debt. In any case the needy will be hit worst, said Alexandrov, adding that credit millionaires, some dignitaries, banks and the mafia will benefit from hyperinflation.

[06] ECU 20 MILLION IN PHARE ASSISTANCE TO DISADVANTAGED BULGARIANS

A financial memorandum for 1995, a framework programme for cooperation between Bulgaria and the EU in the period 1995-1999, and a financial memorandum on cross-border cooperation between Bulgaria and Greece worth a total of Ecu 115 million were signed later on by Ambassador O'Sullivan and outgoing Trade and Foreign Economic Cooperation Minister Atanas Paparizov. Bulgaria is to commit Ecu 3 million to the project. Ambassador O'Sullivan told the press Ecu 100 million was agreed in assistance to Bulgaria in 1996 under the PHARE programme.

[07] BASE INTEREST RATE AND EXCHANGE RATES TO BE DETERMINED BY NEW METHODS

"The BNB decision is the first step towards the introduction of a currency board in Bulgaria," said a banker from the Bulbank Bulgarian foreign trade bank who did not want to be identified by name. "Now commercial banks can formulate their own policies in regard to interest rates which will considerably relieve the speculative pressure on the US dollar," the same source said.

"One of the reasons for the central bank giving up the fixing of base interest rates may be its inability to keep the forex market under control, " said a dealer from the Bulgarian Post Bank who also preferred anonymity. In his view, in this way BNB actually transfers the regulation of the foreign exchange market to commercial banks.

"The BNB latest measure is unworkable," former BNB vice governor Emil Hursev said. In his opinion, such acts cannot have a stabilizing effect, given the lack of a consistent government policy for overcoming the crisis. "A fixed exchange rate of the dollar against the lev would have a real economic effect because it is the speculative strengthening of the US currency unit that speeds up the inflationary spiral in Bulgaria," he said.

In the meantime the State Savings Bank (the financial institution which attracts most personal leva deposists because they are fully guaranteed by the State) announced a two-fold increase in iat annual interest rate on deposits which becomes 360 percent as from January 27, 1997. The reason for this decision is the freefall of the Bulgarian lev.

The BNB decision to eliminate fixed base interest rates was accompanied by a change in the method employed to determine central exchange rates. If for three consecutive days the volume of foreign currency purchased and sold does not exceed 10 million (until now the volume reaching 10 million was a signal for fixing a new level for exchange rates), the central exchange rate for the following day will be determined on the basis of the overall volume of foreign currency traded in those three days.

[08] THREE NEW GAS JOINT VENTURES FORMED

Bulgargaz and Wintershall AG of Germany will establish a fifty-fifty joint venture with an aggregate capital of 100,000 Deutschemark. It will have its head office in Sofia, and its core activity includes trade, transmission and storage of natural gas and other energy sector goods, construction and maintenance of gas pipeline branches. The company will also bid for concessions for existing and future transit gas lines across Bulgaria.

Bulgargaz has already set up a similar business with Russian gas giant Gazprom: the Topenergy Company, established in 1975, with an authorized capital of 120 million leva. In it, Gazprom holds 50 per cent, and the Bulgarian half is shared between Bulgargaz (25.1 per cent), Multigroup (8.25 per cent), Overgas Inc. (itself a 50-50 JV between Gazprom and Multigroup) (8.25 per cent), First Private Bank (3.2 per cent), Bulbank (3.2 per cent), and Chimiport (2 per cent).

Another Bulgarian-German joint venture, with an authorized capital of 100, 000 Deutschemark, will be manufacturing gas and industrial equipment. Bulgargaz will hold 34 per cent in the JV, Gemet AG 15 per cent, and Zimmerman & Jansen GmbH 51 per cent.

Bulgargaz and Russian interests will also incorporate a Moscow- based joint venture called Inter Trans Investitsii and Torgovli. The Bulgarian company and Russia's Inter Investmarket of Russia will hold 40 per cent each of the 15,000 US dollar capital. The remaining 20 per cent will be shared up between Bulgaria's Commercial Bank Biochim and Russia's Stolichny Sberbank. The operation will be handling commercial and financial operations between the two countries and will be investing in Bulgaria.

Bulgaria's natural gas consumption in 1997 is not expected to change from last year's 6,000 million cu m. Delivery of 60 per cent of this quantity is guaranteed under two intergovernmental agreements. Under the first part of the Yamburg Agreement between the USSR and Bulgaria, signed in 1986 and expiring in 2010, Bulgaria is receiving natural gas from Russia at lower- thanmarket prices in repayment for investments made in the development of the Yamburg gasfield and construction work on the pipeline carried out on Russian territory. The delivery of 3,340 million cu m by June 1, 1997 will finally settle this debt. Another 480 million cu m are expected in fees for transiting Russian gas to Greece and Turkey across Bulgarian territory. The rest of the gas will be imported under commercial contracts between Bulgargaz and Gazprom-authorized Russian companies.

[09] BULGARIAN TV STAGES WARNING STRIKE

The BNT management said that political pressure was being put on it from all sides.

The strikers' leadership guaranteed the employment inviolabitlity of the BNT employees directly engaged in the realization of the protest scheme on air.

A lot of Sofianites who had attended the rally of the united opposition in front of St Alexander Nevsky Cathedral came to the BNT building of BNT to express support for the strikers.

[10] BULGARIA, NETHERLANDS END CONSULTATIONS

In Mrs Bokova's words, the Dutch side showed understanding for Bulgaria's problems. The Dutch officials believe that the main reasons for the present political situation in Bulgaria are of economic nature. Dutch politicians said that national and political consensus should be reached so that the country could emerge from the crisis.

[11] IRAQ READY TO SETTLE DEBT TO BULGARIA, IRAQI AMBASSADOR SAYS

Asked what the Iraqi reaction would be if a third country bought the Bulgarian debt, Ambassador Ahmad said that this would not be to Bulgaria's interest because the debt had been recognized by the Iraqi Government as such.

[12] 19TH DAY OF STREET PROTESTS

"For 19 days now the Communists have been pretending they do not see or hear us," Vladislav Kostov, MP of the Union of Democratric Forces (UDF), said addressing a big protest rally of the United Democratic Forces (UtdDF) in front of St Alexander Nevsky Cathedral in Sofia. "People are losing patience, we insist that they [the Communists] go in a fair way - through early elections," he said.

"President Peter Stoyanov will hand over a mandate to the Socialist to form a cabinet, there are about ten days of utmost effort ahead of us during which we should show our anger," Filip Dimitrov of the UDF, and an ex-prime minister, said.

"First we need to prevent formation of a second Socialist cabinet," UDF leader Ivan Kostov told the rally. "Foreign media reporters have asked me many times if the opposition has a progarmme what to do after winning the elections and this shows that the world is convinced in the victory of the UtdDF. "There certainly are people with civic awareness in the Left and your protests have made them think," Kostov said commenting on the intention of some Left MPs to leave the Democratic Left parliamentary group.

Students held a protest procession along Sofia's central boulevards on Saturday. The column was symbolically headed by "blind people" - students with red blindfolds carrying red baloons. Each group of "the blind" was led by a student with a blindfold over one eye. The students passed by the headquarters of the Bulgarian Socialist Party (BSP) waving the national tricolour and chanting "Elections" and "We'll be here every day until the victory".

The Confederation of Independent Trade Unions in Bulgaria (CITUB) came up with a declaration in protest against the dismissal of 69 directors of enterprises and department heads. The dismissals are described as "purges" and "an ongoing criminal act of the Government". "This is a transparent and desparate attempt of the Socialists to place their own true people in key positions at the last moment," the declaration says.

On Monday the united opposition will hold a big protest rally in Sofia. It is expected to coincide with the start of nationwide effective strike actions organized by the CITUB, the Podkrepa Labour Confederation and the Promyana Alliance for National, Union and Civic Actions. The trade unions say that the general strike will be called next week.

[13] 20TH DAY OF STREET PROTESTS

Students carrying suitcases, bags and rucksacks symbolizing emigration from Bulgaria marched through central Sofia on Sunday. The young people called for early parliamentary elections.

"People protest not because they are involved in some political machination but because their human rights are invaded," UDF leader Ivan Kostov said. The responsibility for the starvation and misery, for the catastrophe in Bulgaria rests with the BSP, which is why it must go," he emphasized

It emerged at a rally in Rousse (on the Danube) that next week the opposition is readying more resolute protests with civil disobedience. Protestors in Sliven, South Central Bulgaria, protestors kept piling stones on a "cairn of protest" in the town centre.

After incident-free protests for two weeks in a row, protest marchers in Varna (on the Black Sea) Saturday evening smashed the windows of the headquarters of the local BSP branch, the Interior Ministry said.

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